India and Shell buy to increase energy reserves
- The Guardian,
- Tuesday July 15, 2008
- Article history
The need by major oil companies to acquire new energy production was highlighted yesterday when Shell paid nearly £3bn to buy a Canadian group and the Oil & Natural Gas Corporation of India (ONGC) looked poised to offer £1bn for a relatively small oil company registered in Britain but active in Russia.
Shell has agreed to purchase the Alberta-based Duvernay Oil Corporation for about C$5.9bn (nearly £3bn) to give it access to so-called “tight gas” – natural gas that is hard to extract. Shell’s chief executive, Jeroen van der Veer, said: “Shell has a proven track record in North America tight gas activities. Duvernay could become a valuable part of the Shell portfolio.”
Duvernay has more than 25,000 barrels of oil equivalent per day of production, mainly in natural gas, with plans to raise output to about 70,000 BOEPD by 2012.
Meanwhile, shares in Imperial rose nearly 18% to 910p after a statement saying it had received an “approach” that could result in an offer for the business. Discussions are understood to be taking place between the state-controlled ONGC and the board of Imperial, which is a member of the FTSE 250 and has its head office in London. Last month it reported its biggest exploration strike yet, potentially adding to that reserve base and increasing the potential value of the firm.
The Indian government has told state-owned oil and gas companies to scour the world for new energy sources due to rising industrial and domestic demands. ONGC has not commented on the Times of India’s claim that it was in talks with Imperial about an alliance that could result in an equity stake in Imperial.
http://www.guardian.co.uk/business/2008/jul/15/royaldutchshell.oil
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